Octopus Energy valuation soars to £7.2billion as investors double down

Octopus Energy recently overtook British Gas as the UKs largest domestic electricity supplier

Octopus Energy’s valuation has soared to nine billion US dollars (£7.2billion) as its major investors, Generation Investment Management and Canada Pension Plan Investment Board, have upped their stakes, boosting the company’s worth by 15% from previous valuations.

Sustainable investment firm Generation has increased its share to 13%, backed by fresh funds from US and Australian pension funds, including including Australian superannuation fund Aware Super. Meanwhile, CPP Investments has raised its stake to 12%.

Greg Jackson, founder of Octopus Energy Group, said: “Bringing globally respected long-term investors on board helps raise our profile in key markets, and open up new opportunities to continue our international expansion.” With operations now in 18 countries, Octopus is aggressively promoting its energy software platform, Kraken, especially in North America, where it recently agreed its inaugural licensing deal in Texas.

This valuation leap follows hot on the heels of a December funding round that saw Octopus rake in an impressive $800 million. Tom Hodges, co-head of private equity at Generation Investment Management, said: “The company has accelerated ahead of its UK peers in energy and in Kraken has developed the first credible digitisation platform for utilities.”

Octopus Energy has surged to become the UK’s biggest domestic electricity supplier by customer numbers, after snapping up 1.3 million customers through its acquisition of Shell Energy last year. The eight-year-old firm has edged past Centrica’s British Gas, which had dominated as the largest supplier for two decades, Ofgem figures reveal.

Elsewhere, Octopus has also invested in Ocergy, a tech enterprise focusing on floating offshore wind farms, and has forged a partnership with Energisa Group, a Brazilian energy utility company, marking its debut venture into South America.

Bill Rogers, global head of sustainable energies at CPP Investments, said: “Through this increased commitment to Octopus Energy, we are pleased to support the business as it enters this next period of growth. As a pioneering, and tech-enabled energy company, Octopus Energy has an expanding global footprint and remains a leader and innovator in the energy sector, through both its customer propositions and its support of the global energy transition.”